Diverse lifestyles, changing family structures and a growing population have in many ways redefined what it means to own a home. In response, condominium developments have become an ever-increasing popular way of owning residential property.
What is a condo?
A condominium — or "condo" — is a form of real estate ownership wherein a single property is divided into multiple, independently owned units.
Each owner holds an ownership interest in their respective unit while also holding an undivided interest in the ownership of the condo's common facilities and areas, which are shared jointly with other owners. These common elements include courtyards, walkways, land, lobbies, the exterior structure, elevators, hallways, stairways, laundry facilities and recreational facilities.
HOA has vested interest
Administration of a condominium is accomplished through a home owner's association (HOA). The HOA consists of an elected board of directors, who also own units within the condominium. The association typically oversees the day-to-day operations and maintenance of the condominium complex and is also charged with managing the property or hiring the services of a property management company.
In a case of the HOA enacting the right of first refusal in the sale and transfer of property, the owner is required to offer the property at the same price to other residents within the condominium before accepting purchase offers from the outside.
Politics of condo ownership
Living in a condominium can have political and financial implications. Unit owners are encouraged to actively participate in meetings and contribute to the decision-making process. But, prospective buyers should be aware that actions undertaken by the association can translate into financial obligations for ownership. Regardless, owners must pay fees to the HOA to cover the cost of insurance, shared utilities, property maintenance, amenities and financial reserves. Fees collected may also be used to pay charges incurred in operating the development. Association fees can increase over time, and should any part of the condominium require extensive maintenance, those costs not covered by the reserve, may be assessed to unit owners.
Town house vs. condo
Although town houses share many of the same ownership criteria afforded in a condominium, there are distinct differences. Town houses differ from condominiums in that owners possess ownership rights to their dwelling and the lot on which the town house has been built. But condominium unit owners only possess an ownership interest in their respective units.
Who benefits from condo life?
Those who benefit most from living in a condominium are people who have experience living in an apartment setting and don't mind having neighbors. Also, buyers who prefer not to be encumbered with responsibilities for external maintenance may find living in a condominium advantageous.
Prospective buyers should be diligent in their examination of condominium living. It is important they examine the fees and rules associated with ownership before committing to a purchase. Still, there are benefits afforded to the right person. Seek the guidance and insight of a trained real estate professional when contemplating a condo.
Sean and Aimee McDonald can be reached at 775-250-8335 or email@example.com.